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There are always policy questions about the degree to which public regulation should be enforced by government actors, by private actors, or by a combination of both.  In securities law, for example, striking the right balance is a perennial debate.

Which is why I read with interest this New York Times story about efforts to combat counterfeiting in China. 

China has a serious problem with counterfeit goods.  To some extent, that kind of problem can be addressed via government enforcement actions; however, China also suffers from what one might describe as an extreme case of regulatory capture – namely, corruption at the local level that compromises enforcement efforts.

So China has turned to private enforcement, by bolstering its consumer protection laws: consumers who purchase counterfeit goods can get damages equal to several times the value of the product.  And predictably, these laws have spawned a new profession: counterfeit hunting.

That by itself would not be so bad – why not let consumers, acting like private attorneys general, ferret out counterfeit goods?  The problem is, since damages are based on the number of products purchased, hunters purchase counterfeits in large numbers, filling warehouses with them.  They also target minor labeling errors…

I’m in the midst of grading 110 exams while traveling on an ill-timed but worthwhile weekend trip to an orphanage in Haiti. I’m sure you can feel my pain. I’ll see you next week with some possible reflections on corporate interests in developing countries. 

Many thanks to Haskell Murray and the Business Law Prof Blog editorial crew for inviting me to serve as a guest blogger during the final countdown to 2017.  For the next few weeks, I’d like to share some of my research in the areas of amateur sports and tax.

Like many, I am an avid enthusiast of the Olympics.  During the 2012 Summer Games in London which highlighted extraordinary athletic prowess from the likes of Michael Phelps, Usain Bolt, and the all-impressive gold medal beach volleyball duo Ross and Kessy, Marco Rubio introduced Bill S.3471 (The Olympic Tax Elimination Act (OTEA)) which proposed to exclude from U.S. Olympic athletes’ gross income the value of any prizes or awards won during the Games.  

This bill piqued my interest in exploring the tax issues facing U.S. Olympic medal-winning athletes.  In 2013, my Central Michigan sports law colleague Adam Epstein and I published Taxing Missy: Operation Gold and the 2012 Proposed Olympic Tax Elimination Act, which explores general tax issues within sports, investigates the U.S. Olympic Committee’s (USOC) Operation Gold program (awarding $25K for gold, $15K for silver, and $10K for bronze medals won at the Olympics by U.S. athletes), analyzes…

KKS

For the next few weeks, we will be joined by Clemson University Legal Studies Professor Kathryn Kisska-Schulze. I met Professor Kisska-Schulze at the SEALSB Annual Conference earlier this month and enjoyed her presentation on the appropriate tax home for college athletes (if and when they are paid).

In addition to a JD, Professor Kisska-Schulze has an LLM in Taxation. She has published extensively in the tax law area, intersecting most frequently with sports law and environmental law. I look forward to her posts, and welcome her to the blog.

Okay, this post has nothing to do with the subject line; given the time of year, I just couldn’t resist.

(Maybe we’ll just characterize that episode of WKRP in Cincinnati as a demonstration of PR tactics gone wrong.  See?  There’s a business law hook).

Anyhoo, today I want to call attention to the phenomenon of the fake whistleblowing hotline. 

As compliance becomes an increasingly large part of corporate operations – and a de facto reconfiguration of corporate governance standards – it seems that companies are fond of creating “whisteblowing hotlines” to demonstrate their commitment to compliance with the law.  Public companies, in fact, are required to do so under Sarbanes-Oxley.

Which is why two recent news items are so disturbing.  First, in connection with the Wells Fargo fake account scandal – on which both Anne Tucker and Marcia Narine Weldon recently posted– it turns out that employees who offered tips on the Wells Fargo whistleblowing hotline were quickly fired; meaning that the hotline itself operated as a kind of reverse-ethics test to weed out employees most likely to object to Wells Fargo’s practices.

And it turns out that Wyndham Vacation Ownership did the same thing.  This company, which sells…

For this week’s post, I offer a plug.  I just posted to SSRN a draft chapter, Limiting Litigation Through Corporate Governance Documents, for the forthcoming Research Handbook on Representative Stockholder Litigation (Sean Griffith et al., eds. 2017), published by Edward Elgar Publishing.  For those who are interested, here is the abstract:

There has recently been a surge of interest in “privately ordered” solutions to the problem of frivolous stockholder litigation, in the form of corporate bylaw and charter provisions that place new limitations on plaintiffs’ ability to bring claims.  The most popular type of provision has been the forum selection clause; other provisions that have been imposed include arbitration requirements, fee-shifting to require that losing plaintiffs pay defendants’ attorneys’ fees, and minimum stake requirements.  Proponents argue that these provisions favor shareholders by sparing the corporation the expense of defending against meritless litigation.  Drawing on the metaphor of corporation as contract, they argue that litigation limits are often enforced in ordinary commercial contracts, and that bylaws and charter provisions should be interpreted similarly. 

In this chapter, I recount the history of these provisions and the state of the law regarding their enforceability.  I then discuss some of the doctrinal and

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